Experts suggest strategies for optimizing investment portfolio performance in a low-rate environment.

It may be necessary to reassess common portfolio strategies in light of a lower interest rate climate.

The Federal Reserve's decision to lower the benchmark interest rate for the first time in over four years on Wednesday signifies a shift in the macro environment that investors should consider when making investment decisions in the upcoming year, according to VanEck CEO Jan van Eck.

"To navigate the market fluctuations of the next year, investors should examine their equity portfolio and consider how to construct it for resilience."

While the small-cap index finished up 2.1%, the large-cap index closed only 1.4% higher on the week. J.P. Morgan Asset Management's Jon Maier believes the small-cap index's outperformance may continue as interest rates fall.

The firm's chief ETF strategist stated that small-cap companies will benefit from lower interest rates during an easing cycle.

Experts suggest revisiting not only equity strategies but also cash holdings. Although the average return on the 100 largest money market funds is still above 5%, according to Crane Data as of Friday, Maier predicts some of that money will flow back into bonds.

"The fixed income market is experiencing a significant influx of funds due to the current rate environment, and this trend is expected to continue. Approximately six and a half trillion dollars in money market funds are expected to flow into either longer-duration fixed income or other areas of equities."

As rates decline, van Eck identifies the federal deficit as a potential challenge for markets. Despite this, he suggests maintaining some popular portfolio hedges while repositioning.

According to van Eck, the government's ability to continue stimulating the economy while spending more than they're taking in through tax receipts will cause uncertainty. "And hedges like and are great for that," he added.